Pension advice and retirement planning

Whether you can afford to retire depends on factors like how much you’ve saved, when you hope to retire, and the lifestyle you’re expecting in retirement. You can get a sense of how much you might need by checking the Retirement Living Standards (RLS), published by the Pensions and Lifetime Savings Association. The RLS gives estimates of what retirement might look like at three different levels of income.

Your adviser will use the Retirement Living Standards in conversations with you. They’ll also use a type of forecasting called cashflow modelling to help you see the best ways of using your pension and investments to support your retirement.

A defined benefit (DB) pension – sometimes called a final salary pension – pays a retirement income based on your salary and how long you have been a member of your employer’s pension scheme. Defined benefit pensions are most common in the public sector and older workplace schemes. A tax-free lump sum will usually also be available. In some schemes, you will give up some of your income to pay for a lump sum.

A defined contribution pension lets you build up a pension pot that provides a retirement income based on how much you and your employer contribute and how much this contribution grows. Up to a quarter of the pot can usually be taken as a tax-free lump sum, though this would reduce the amount available for your retirement income. The value of a pension pot can go down as well as up.

In most cases, you don’t need to get an adviser by law, but deciding how to save for retirement is a complex decision. Also, some decisions, like whether to start taking an income from your pension, can never be unmade. That’s why personalised advice from a qualified adviser can bring real relief. 

The Financial Conduct Authority (FCA) requires you to take financial advice before transferring if the cash equivalent transfer value (CETV), of your defined benefit (DB) pension is over £30,000.

MoneyHelper is a free financial guidance service backed by the Government. It’s there to help you understand your pension and other finances, but it can’t give you personalised advice – for that, you’ll need a qualified adviser.

Simply put, you should put as much into your pension as you need to meet your goals. Your adviser will take the time to find out what you really want from retirement and where you’re at right now. Then they’ll tell you whether you’re on track to reach your goals and advise on what to do if not.

If you have several pensions, there are both upsides and downsides to nesting them in a single place. That’s why we’d recommend talking to a financial adviser before you consolidate your pensions. They’ll explain all the possible outcomes of your decision and help you understand whether consolidating is what’s best for you.

You might have heard that when you die your pension just disappears. Luckily, that’s not true. In most cases, you can choose someone who relies on you for financial support (known as a dependent) to be paid a fixed amount of your pension, but you’ll likely have other options too. Aviva Financial Advice will help you understand your situation and prepare for the future – whether that’s tomorrow or the year twenty one hundred.

If you have a defined contribution (DC) pension, you can legally transfer it without a financial adviser. However, your adviser can talk you through all the implications of a transfer. For example, some defined contribution pensions come with benefits like promised minimum rates and additional death benefits that you could lose if you transfer.

You can currently get your State Pension at age 66. But that age will gradually increase for people born after 5th April 1960.

The amount you get depends on your National Insurance record. Aviva Financial Advice can help you get as much as you’re entitled to. They can also help you make up for any gaps in your national insurance contributions.

Currently you can take 25% of your pension in Tax Free Cash at age 55. From April 6th 2028 this will be age 57 (unless you have a protected pension age). You might be tempted to take the full amount as soon as you can. Your adviser can explain the potential drawbacks of that approach and suggest some more tax-efficient ways of managing your wealth.

The pension annual allowance is the total amount you can grow in your pension pot before you have to pay tax. The annual allowance is currently £60,000.

Annual allowance is measured differently for defined benefit (DB)- and defined contribution (DC) pension schemes. For defined benefit pensions, it’s measured according to how much your pension grows over the tax year. Your adviser can help you make sure you’re contributing to your pension in the most tax-efficient way. For defined contribution pensions, it’s set at the total of your and your employer’s contributions.

Tax benefits are dependent on individual circumstances and are subject to change.

Yes, you can start a pension for your children or grandchildren if you’re their legal guardian. Your adviser can guide you through your options, help you set up a pension, and start making contributions.

Tax benefits are dependent on your child's or grandchild's circumstances and are subject to change.